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Video 27:44
Down in Jungleland

Updated
Tue 22 Oct 2013, 8:16 PM AEDT

Down in Jungleland

Transcript

Could you work for $2.13 an hour?

Natasha Vukelic left her job as an anchor and news director for a Florida TV station because once she'd factored in the long hours, her salary - before tax - of $28,000pa was yielding her not much more than America's minimum wage of $7.25 per hour.

She headed for the big smoke chasing better pay. So how did she end up in a bar in working class New Jersey earning $2.13 an hour plus whatever she could scratch together in tips?

Alongside her in the bar on the same deal is Mike Doyle. His plummet into the ranks of America's working poor is even more dramatic. He was a Wall Street trader - a bona-fide one-percenter - clocking off mid-afternoon and enjoying the good life in neighbouring New York. Then the GFC clobbered his hedge fund and here he is - mixing drinks at night and taking the dawn ferry to Manhattan to try - so far in vain - to resuscitate his financial career.

"Five, ten years ago I would have been more of the pull-yourself-up-by-your-own-bootstraps kind of guy but I guess my views have shifted definitely more towards the centre. I think I'm more concerned with how other people are able to provide for themselves. I think it's a real big issue now. Every family I know, all of these people have two jobs." MIKE DOYLE - Bartender

Mike and Natasha are just two stark examples of America's middle-class collapse as wages go backwards and secure jobs with good pay and benefits disappear. And as former professionals compete for low-paying jobs they're forcing out America's huge ranks of pre-existing poor.

"Most Americans have seen their incomes stagnate or fall since 2008. In fact, if you look in the middle, the average typical American income today is lower than it was say 15 years ago. Median income of a full-time male worker today is lower than it was 40 years ago." PROFESSOR JOSPEH STIGLITZ Economist, Columbia university

The ABC's Economics Correspondent Stephen Long joins Foreign Correspondent for a journey into the hard reality of post-GFC America. In New Jersey he finds hometown boy Bruce Springsteen's tales of working class desperation have a new and urgent currency and where for many the American Dream is dead and buried. While on the opposite side of the country in the ultimate dreamland of California, the reality for Wal-Mart worker Juan Becerra is a pay-check - on an exceptional fortnight - of $500 as he shares a single room in a far flung suburb with his wife and three children.

Despite the grind, some refuse to give up. Like young mother of one Tayzia Treadwell - working as a security guard in one of the toughest neighbourhoods in America, while raising her child and studying at business college.

"I want the good life that everyone dreams when you're in school and you draw the little house and the picket fence and a dog. I just want a happy ending. I don't want to struggle. I want to wake up knowing that my daughter has everything she needs, I have everything I have and then come back give to my community like where I grew up. I just, I want to live the good life." TAZIA TREADWELL ______________________________

Transcript

LONG: They call it The Garden State, but the slogan is at odds with the gritty industrial heartland of New Jersey. It's the home of heartland rock, pioneered by one of New Jersey's favourite sons, Bruce Springsteen. His ballads of working class struggle have taken on new relevance after The Great Recession.

A year after Hurricane Sandy washed away the boardwalk here at Seaside Heights, it's once again been devastated by fire.

NEWSREADER: [news footage] "And 48 hours after the fire, hundreds of people still came down here to the boardwalk just to take pictures and relive those boardwalk memories".

LONG: New Jersey will rebuild from the natural disasters, but the man-made economic disasters still rocking America, is proving harder to overcome.

PROFESSOR JOSEPH STIGLITZ: "The recession is not over for most Americans. Most Americans have basically seen their incomes stagnate or fall since 2008. In fact, if you look in the middle, the average typical American median income of a full time male worker today, is lower than it was 40 years ago".

DR MARY GATTA: "Close to 50% of Americans are working and are economically insecure. And that means they can't afford their housing, their healthcare, their childcare, their transportation. They can do no saving for an emergency or their own retirement. Half of the country lives in economic insecurity".

LONG: You mightn't pick it, but New Jersey is the third richest state in the richest country in the world, yet it's possible to live full time here and live in poverty. The dominant story's been Obamacare and the debt ceiling, the enduring story is the struggle to make ends meet. The middle class in the US is shrinking as wages go backwards and secure jobs with good pay and benefits disappear.

NATASHA VUKELIC: "I did not expect I'd be in this situation. I'd just turn thirty and when I turned 30 I started getting very nervous about the fact that I need to really get out of this now".

LONG: Meet the new face of service work in America. Smart, tertiary educated and working for tips in a bar - it's not the career Natasha Vukelic had in mind when she graduated with top grades from a prestigious university and landed her dream job in broadcasting - shame about the money.

NATASHA VUKELIC: "When I was a reporter and anchor in Orlando and an associate producer in Orlando, I was making ten or eleven dollars an hour and then I accepted a job as a news director and before taxes I was getting paid $28,000 a year".

LONG: "Gross, before tax?"

NATASHA VUKELIC: "Before tax and I remember every two weeks I would get my pay cheque and it was just over $800".

LONG: The pay was so poor Natasha quit and moved north to Jersey in search of a job offering more money. Incredibly that was bar work. In a fast paced bar she can earn good money on tips but the base wages are appalling.

"So this is what you are earning?"

NATASHA VUKELIC: "Yeah you can see right here my rate is $2.13, the hours are 28 hours. Without tax says it's $59.64 but after taxes it's $27.00".

LONG: "Just 27 bucks is the base wage".

NATASHA VUKELIC: "And this isn't a weekly pay cheque, this is a pay cheque I get every two weeks. So that's my wage so what is that... not even 15 dollars each week. This one right here, my hours are 37 hours so it's almost a forty hour work week. After taxes my pay cheque is $32.00".

LONG: The federal minimum wage in the US is $7.25 an hour but for restaurant and bar staff it's much lower - $2.13. Yep you heard right. Just two dollars and thirteen cents an hour. It's tips or starve".

At a seaside bar in Long Branch New Jersey we meet some of Natasha's friends and colleagues and shout them a drink. They'll need it after what I've got to tell them.

"What would you all say if I told you the minimum wage in Australia is more than $16 and that applies to service workers and if you're a casual worker so you don't get paid holidays, it's more than $20 an hour".

LIZ: "I would say I'd like to move to Australia".

NATASHA VUKELIC: "I'm with you on that one. I want to know who set the bar at $2.13? Like is there a restaurant god that comes down and says in New Jersey we're going to pay you $2.13. I mean couldn't they make it $2.57 so at least so we're closer to three, you know?"

LONG: But even among this crowd working hard for the money, not everyone's convinced about a bump in the minimum wage.

MIKE DOYLE: "If you raise the minimum wage to make a significant dent you have to really raise it and unfortunately that would probably kill a lot of proprietors and I don't want to jump into their defence but again you're still going to rely on the volume of people coming and going".

LONG: Like Natasha, Mike Doyle is a former career professional grappling with a new reality.

MIKE DOYLE: "On slow days if you're getting zero in the way of tips, that's going to hurt".

LONG: It's sunrise and after serving drinks in a bar until the wee hours, Mike Doyle is off to work at his second job. Most days he still heads into Manhattan, 45 minutes across the water. Not so long ago he was a one percenter, at the very top of the income pile. Now he's working two jobs to raise a family and just getting by.

"How often are you heading into the city to trade?"

MIKE DOYLE: "I'll go in about four or five days a week. You know I can work from home. Sometimes if I'm working too late at night in the bar I'll work from home just because I get home at two in the morning and if I have to get up at five I need a few more hours than three hour's a night of sleep".

LONG: "But bar tending's your main job now?"

MIKE DOYLE: "Yeah well it is my main source of income for the moment, yeah. I mean what I do in the city now is on such a smaller scale than what I used to do, that I, you know, a guy's got to do what a guy has to do to pay for the bills. Five years ago, seven years ago I had the life of Riley. My hours were much shorter. I mean I would be leaving New York at three o'clock and I was done and my income was ten times what it is now".

LONG: Mike used to be a high flying Wall Street trader until the disgraced broking firm MF Global collapsed and his hedgefund was hit by the fallout. As we approach Manhattan he tells me his experience has changed his views a little.

MIKE DOYLE: "Five/ten years ago I would have been the pull yourself up by your own bootstraps kind of guy but I think I'm... I don't know... I think I'm a little bit... more... I guess my views have maybe shifted definitely more towards the centre. Well I wouldn't call myself a liberal but I think I'm more concerned with how other people are able to provide for themselves. I think it's a real big issue now, especially with the fact that I think every family I know has... all these people have two jobs".

PROFESSOR JOSEPH STIGLITZ: "Well America's become a rich country with poor people. That's the irony".

LONG: At the hallowed halls of Columbia University in New York, Nobel laureate economist Joseph Stiglitz has been charting the rising tide of inequality.

PROFESSOR JOSEPH STIGLITZ: "They don't know day to day how much they have to live on, so you make them bear the risk of this capriciousness of the people who walk through the door, on how much tips and how much they're going to order, whether they're generous or whether they're tight".

LONG: "So if we've got college graduates taking jobs as waiters, servers, bartenders, what does that mean for the people who used to do those jobs?"

PROFESSOR JOSEPH STIGLITZ: "Well they move down the rung".

LONG: It's a little over half an hour from Manhattan to Newark New Jersey - but it's a world away. In the shadow of a Newark public housing estate lives a young woman, with a young child, struggling to get by.

TAYZIA TREADWELL: "My name is Tayzia. I'm 20 years old. I have a one year old daughter. Her name is Zenar. My mum growing up was a single parent. She had my brother and I. She was great. Like we didn't want for anything. In school I was great. Actually my grades were always good, A's and B's. I graduated in 2011. I graduated from Big Picture Academy and a month or maybe three weeks afterwards I found out that I was pregnant with my daughter.

She's the cutest thing in the world. She says everything from her first and last name, to her ABCs. She knows my name is Tayzia. She's like the best thing that ever happened to me".

LONG: Tayzia Treadwell was working on minimum wage in a fast food restaurant when her little girl came along. Her take home pay after taxes was about $170 a week.

TAYZIA TREADWELL: "I'm living in poverty, like it's a struggle. I will go without just so my daughter could have".

LONG: A bone in Zenar's back didn't form properly during pregnancy. She'll need an operation when she's four or five.

TAYZIA TREADWELL: "I'm sure I'll have to pay something additional so it's like do I start saving now cause I'm not sure of the exact cost yet but surgeries are normally expensive so...".

LONG: Tayzia is now working as a security guard on public housing tenements, earning a little more than minimum wage, $10 an hour although the cost of commuting can eat into the money. Newark's a dangerous city. In the three weeks before we first met Tayzia, 16 people had been shot.

TAYZIA TREADWELL: "It's hard, that's really the most I could say about it is like it's hard. I try not to dwell on things that I can't change. I mean I pray nights for better days. I pray for a better job that pays more but it's just hard".

LONG: When you're struggling a visit to a cheap and cheerful diner can light up the day.

"What would you recommend? What's good?"

TAYZIA TREADWELL: "I usually have the fish and home fries with fried onions. Yeah it's great".

LONG: "Okay well let's make it two".

TAYZIA TREADWELL: "Okay".

MAN WATCHING: Here we go, baby.

LONG: "Oh that's me. Wow!"

TAYZIA TREADWELL: "Thank you".

RASHID (CAFE OWNER): "You want some ketchup?"

TAYZIA TREADWELL: "No just syrup".

RASHID (CAFE OWNER): Syrup?

LONG: "I don't know how you can put syrup on it.... but it looks good. It looks really good and I am very hungry".

The cafapos;s owner Rashid overhears us talking about the minimum wage and weighs in with his view.

RASHID: "My guys get above minimum wage. They all get different salaries but they definitely get above minimum wage because.... I'll tell you why. If I pay my guys the minimum wage and they're barely getting by, they're not going to show the same passion, they're not going to have the same drive and they're not going to come to work on a consistent basis because they're barely getting by anyway. But you pay good, you get good".

LONG: "You can't live on the minimum wage".

RASHID: "No you can't live on minimum wage. The average rental for a one bedroom apartment in you know New Jersey has to be anywhere from eight to a thousand dollars. That's their whole cheque for the month. You have to eat and you have to have a phone, you have to have lights, you have to have a car, you have to have - I can name everything - and no... you haven't even added food yet so you know you definitely have to raise the wage in New Jersey".

LONG: But not by much according to New Jersey Governor Chris Christie. Christie's being touted as a Republican presidential candidate in 2016. Earlier this year, the Democrats put up a bill to raise the minimum wage in New Jersey by a $1.25 then link it to inflation so it maintains its value - but Christie vetoed it. He wants the rise capped at $1, phased in over three years but the fight goes on. At the coming state election, New Jerseyans have a chance to amend the Constitution to raise the wage and lock in annual inflation linked increases.

PROFESSOR JOSPEH STIGLITZ: "Actually most Americans support the raising of the minimum wage. The minimum wage in the United States is at the level, adjusted for inflation, that it was in the 50s. That's 60 years ago!"

DR MARY GATTO: "It is morally outrageous that we are in a country as rich as the US where we have such low, incredibly low, minimum wages".

LONG: The Christie campaign hits Plainsboro, home to a large migrant community of Marathi Indians. They're holding a festival in honour of Ganesh - the god of wisdom, good fortune and prosperity. The audience is rapt as Governor Christie evokes the American dream of social mobility.

GOVERNOR CHRISTIE: "There are universal truths that we want a safe and secure world, a world filled with opportunity that rewards hard work, a world where our children and grandchildren can look forward to a brighter future for themselves than we had for our families. That's what gives me such great hope for our future. Bright, happy, enthusiastic children - their lives completely ahead of them - believing that tomorrow will truly be better than today".

LONG: That promise has been dashed in Camden. Camden New Jersey holds the grand slam of terrible titles. It is the poorest city in the United States. It has the highest per capita crime rate, the highest violent crime rate and the highest homicide rate in the country. On State Street the Board up Crew is sealing up abandoned homes to stop them being used as crack dens.

MIKE BRENNAN: "There's gunfire, just random gunfire, not so much shooting at you but you never know what's coming".

LONG: Our guide in Camden is Mike Brennan who lives just outside the city.

MIKE BRENNAN: "Right before Halloween they would have Hell Night, and parts of the city would go up in flames".

LONG: Mike used to work for the New Jersey Labour Department in a special team sent into shutting factories to help workers find new jobs. But he lost his own job when the program was cut back by the Christie administration. Camden, he explains, was once a manufacturing metropolis - home to the New York Ship Company, to RCA and to the world famous Campbell soup.

MIKE BRENNAN: "Well manufacturing industry has not been replaced. What we see growing or thriving would be the scrap metal business..... scrap metal, scrap wood".

LONG: "So they're basically recycling the abandoned factories".

MIKE BRENNAN: "Yes. Close them up, tear them down and ship the parts to smelters across the ocean".

LONG: Police and emergency services is another thriving industry and so is the drug trade.

MIKE BRENNAN: "People that worked in these manufacturing facilities, to the extent that there was employment for them, they have to take a bus to the suburbs, work in a fast food restaurant, work in a retail store for a minimum wage and people can't survive on that so I guess they resort to more unsavoury activities".

LONG: If you think these problems are confined to New Jersey, think again. Across the vast continent, from the Atlantic to the Pacific, working people are living in grinding poverty. LA, the City of Angels, city of dreams, with its lure of fame and fortune - but away from the beaches and the glamour of Hollywood, out in the San Gabriel Valley, this is family accommodation for the working poor.

JUAN BECERRA: "This is pretty much where we sleep".

LONG: "This is your room?"

JUAN BECERRA: "Yeah me and my wife on this side, my son Jeremiah on this side and my baby right here.... and then we have my daughter on this side, on top".

LONG: "And so what's happened to the bed here?"

JUAN BECERRA: "It's actually broke right now we usually just lay it on the floor and she sleeps on the floor".

LONG: "So normally there's five of you sleeping in this room?"

JUAN BECERRA: "Yes".

LONG: "Wow... wow".

Juan Becerra works for Walmart, the world's largest retailer, the world's biggest private employer. After three years his pay rate has just risen from $8.40 an hour to $9.20. Juan says the company wants staff to be openly available for shifts - on call 24/7 - but he generally only gets 25-30 hours work a week.

JUAN BECERRA: "I'm making five hundred dollars every two weeks".

LONG: "Five hundred dollars...".

JUAN BECERRA: "And that's on a good cheque - that's a high cheque. On a regular cheque it's like about $430.... $430 every two weeks".

LONG: The Becerra's rely on government food stamps to feed their children. They used to rent an apartment with two bedrooms, then Juan's wife had to quit work. Ariana was carrying heavy trays in a diner and got carpel tunnel syndrome. They couldn't pay the rent on one wage and had to move in with her parents.

LONG: "I think any marriage would be under strain if you had two adults and three children living in a room this size. This is basically a single room".

JUAN BECERRA: "Yeah".

ARIAL BECERRA: "It isn't easy, it really isn't".

LONG: 6pm and Juan's heading off for the evening shift. He'll finish after midnight and back up for another shift the next morning. He wants to go to college and get a degree - find a better job - but he can't afford it.

JUAN BECERRA: "People come over here to this country for the American dream but when they can't even give their citizens the dream, it just hurts. It's like I work for a living to provide for my family, to live the American dream. With the poverty wages that Walmart gives us, there's no way I can live the American dream. I'm just going to be stuck at the bottom".

LONG: America's working underclass has no sick leave, no holiday leave, no healthcare benefits in a society where medical aid is prohibitively expensive. As career jobs with decent benefits dwindle, graduates like Natasha Vukelic are living the perils.

NATASHA VUKELIC: "Basically what happened was I was attacked by a pit bull and it was a really bad attack and I was in the hospital for a month. I was so concerned they were going to remove my leg because my leg looked like it was falling off when the attack happened. And I was also so concerned because I didn't have health insurance and so I kept on saying to the doctors and to the men in the ambulance - I was kind of going in and out of consciousness - and I was like, you know, you cannot... you do not have permission to remove my leg.... you do not have permission to remove my leg. But then I would also say I don't have any health insurance. So I kept on going back and forth from 'don't remove my leg' and 'I don't have health insurance' and I was absolutely freaking out about both things".

LONG: The hospital bill? $250,000... that would have bankrupted her - or left her with decades of debt, had the hospital not decided to treat her as a charity case.

"There's an irony here - because you were off the books, cash in hand, you actually could apply and get charity assistance but if you'd been on the minimum wage with tips, you wouldn't have been eligible".

NATASHA VUKELIC: "Right I consider it one of the luckiest things that ever happened to me".

LONG: Across in Newark it's a special day for Tayzia Treadwell. On top of work and parenting, she's been studying at business college and done well. Tayzia graduates today with a certificate qualifying her as a medical assistant. She's hoping one day she might become a nurse.

TAYZIA TREADWELL: "I want the life, like the good life, the good life that everyone dreams of. Like when you're in school and you draw the little house and the picket fence and dog, like... I just want a happy ending and I don't want to struggle. I want to wake up knowing that my daughter has everything she needs, I have everything I have, and then come back, give to my community like where I grew up. I just.... I want to live the good life".

LONG: "You want the American dream".

TAYZIA TREADWELL: "I want the American dream".

LONG: I'm wishing, hoping that Tayzia's dreams do come true, but the cold hard facts don't bode well. The American national myth is that anyone, of any class who works hard will prosper, but more and more, for so many people, it's just that - a myth.